[USER]

I had a baby last year and my mom moved in with us to nanny for us while we work. I’d like to do something for retirement for her in the couples years she’ll be with the baby until he goes to school.

Is my best option to have her open a Roth IRA and just contribute to that every month for her?

I’m not totally worried about retirement for her as we are first gen Americans and my siblings and I will take care of her through her life (she’s only 55) but I want her to still have something of her own for it.

Thanks in advance!

[Bam]

Not invested related
But I adore your mom for helping out and you and your husband for looking after your mom!

[Cheryl]

Has she already paid in the max years to social security so she can receive the maximum benefit for what could be decades in retirement?

It could make sense to pay her above the table and pay the minimal social security withholding (be sure to look up the amount she needs to make per year to qualify as substantial enough to count toward a SS benefit later) Payso ing in a bit nowshe can have the max payout on her SS.

Paying into SS also makes her eligible for disability SS should she need that at some point.

This could impact her as much or more than IRAs. Best to have both though.

It’s commendable that you and your siblings plan to take care of your mom, and of course you will, but why not have her in as good a shape as possible.

One never knows what life circumstances can happen for siblings or you that you/they can’t step up to help much later.

[Christie]

We need to consider her age here. The best way is to pay her cash and she puts that $ into a taxable brokerage. She will only pay taxes on the gains when she pulls $ out …

at the lower capital gains tax rate (and again, only on the gains portion) bec it will be assumed she paid taxes on the income before it went it … and even then, depending on her total income at the time she pulls it out, a portion may be tax free.

Anyway, don’t make her pay income tax now on all of it.

If this was an 18-yr old helping you then yes a Roth IRA would be best bec it would have time to grow multiple times in that acct before pulling it out.

[Sophie]

Are you paying her officially for nannying? You can’t contribute to a Roth IRA without taxable income.

Otherwise yes, pay her and have her contribute to a Roth and if you want to contribute more, you could also do a regular brokerage account in addition.

[Luciano]

Your mom will need a w2 to open an ira. You could pay her for babysitting as long as she claims the money she will be able to contribute to an ira.

A roth would be preferred in this case.

[Author]

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